The funding was provided under Transport for NSW's Boating Access Dredging Program which is targeted at ensuring safe navigation of channels and entrances, particularly in regional waterways.

It will enable Shoalhaven City Council to start a program of work including pre-dredge planning, design work, and other related studies such as survey and channel design.

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Minister for Local Government Shelley Hancock said the completion of the work will inform a future investment decision to dredge the lower Shoalhaven River at Shoalhaven Heads.

"The intention of this work is to consider options for future dredging and beach nourishment, identify a preferred option in consultation with the community, develop the design of the preferred option, and seek the necessary approvals including completion of additional studies," said Mrs Hancock.

The project's ultimate aim will be to provide a navigation channel of an appropriate depth and width between the Holiday Haven Caravan Park boat ramp and the public jetty at Jerry Bailey Road.

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It also aims to enhance foreshore amenity and erosion mitigation, and support additional opportunities such as improving water quality and ecology outcomes.

Mrs Hancock said councils are responsible for delivering and managing their projects, which includes obtaining necessary approvals.

"This program will ensure better access and also create flow-on benefits for tourism, marine-based businesses and local economies," Mrs Hancock said.

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"Eligible projects are expected to improve navigation and waterway access, promoting recreational and commercial boating opportunities, as well as economic growth and productivity."

"All projects funded under the program must be completed within 18 months of securing funding."

More information on the program is available here.